Dubai is a perfect destination for setting up an Offshore Company due to the enormous business benefit the business hub offers to foreign investors. Offshore Company in Dubai has multiple advantages to the foreign investor.
Offshore Company Formation in Dubai is a prospective business investment for foreign investors who wish to conduct international trade operations. However, Offshore Company will be having no trade links with the mainland of UAE.
Why Choose Dubai for Setting Up an Offshore Company?
Generally, the investor of the Offshore company resides outside the business location where the offshore company is located. Offshore Companies are the tax-saving instrument for most foreign investors from Europe and the US.
However, for many, it is a lucrative business opportunity for gaining new customer markets, expanding the business beyond national boundaries, conducting international trade operations, and more. Foreign investors prefer Dubai to set up their offshore company due to many business benefits.
Advantages of setting up an Offshore Company in Dubai
The advantage of setting up an offshore company in Dubai is that the owner does not have to divulge any detail about the assets. The company will own all the assets. Secondly, there is a 100 % tax exemption on income tax, which helps in saving the cost.
Thirdly, it is easy to incorporate and there is an assurance of confidentiality of shareholders. Also, the Offshore Company is out of the scope of UAE Mainland Company Laws. The daily business operations or the functioning of the company is solely in the control of the investor alone.
Most of the foreign investors set up an offshore company in Dubai under the following business activities.
- General Trading
- Holding Company
Jebel Ali Free Zone Authority (JAFZA) Offshore Jurisdiction
In Dubai, it is the Jebel Ali Free Zone that offers Offshore Company Formation packages for foreign investors. There is a wide range of business activities the entrepreneur can choose for their offshore company.
Key Highlights – Jebel Ali Free Zone Offshore Jurisdiction
Jebel Ali Offshore is one of the most popular destinations for setting up an offshore company in the UAE. Following are the highlights of Jebel Ali Free Zone Offshore Jurisdiction. Foreign investors must follow a certain process to ensure they have hassle-free company registration.
1. Shareholding Pattern of the Company
An individual or a group of shareholders together can set up the company. Offshore companies in Dubai can have a corporate shareholder too. The shareholders decide the company’s capital structure and have various classes of shares.
2. C-Level Staff Required
The JAFZA Offshore company must have at least one Director and a Secretary to proceed with the registration and other setup processes.
3. Trade Name Reservation
The trade name must meet the guidelines of the Business Jurisdiction’s Trade Name policy. The Trade Name Approval by the authorities is an important step in the offshore company setup.
4. Official Registered Agent
An Official and Approved Registered Agent of the Offshore Jurisdiction must be available for the company registration process. Also, the address of the Agent in UAE will be the communication address for the offshore company.
5. Accounts Audit Statement
The Offshore Companies in JAFZA are required to prepare regular audit reports and account statements. A detailed record of all transactions, financial statements, and supporting documents are to be prepared and stored in the Registered Agents office. (Records of up to 10 years are to be stored for reference).
The JAFZA Offshore Authorities will have mandatory inspections and document submissions. Hence, the company documents must be submitted to review if the authorities request the same.
6. Absence of Corporate Tax
There is no corporate tax in UAE for offshore companies, however, taxable supplies in UAE will have a VAT (5%) impact.
How to Setup an Offshore Company in Dubai?
Offshore Company IBC (International Business Company) in Dubai can be incorporated only through the Registered Agent of the Offshore jurisdiction. Hence the Offshore company address will be the same address of their Registered Agent since the Offshore company cannot maintain a separate Office.
Offshore companies can do international trading easily and banks in the UAE support it. The most important thing to be kept in mind is to identify and appoint a credible & trustworthy Registered Agent for the Offshore company.
Steps in Setting up the Offshore Company in Dubai?
To set up an offshore company in Dubai there are a few steps to be followed. The Registered Agents will handle the company’s setup process on behalf of the foreign investor and register the company remotely. There is no requirement of the investor’s physical presence for registering the company.
- Select the right business activity and the Offshore Jurisdiction. (In Dubai it is JAFZA).
- Finalize on the tradename and get the name approval for the company
- Submit the required shareholder documents and fist year company incorporation fee
- Receive the company incorporation certificate and other company documents (agreement, Article of Association, etc.) from the Authority
- Proceed to open an Offshore Bank Account from selected banks in UAE after passing their KYC Clearance.
- Start the business operations seamlessly from the next day of receipt of the company documents.
How Business Consultants will help in Setting Up an Offshore Company in Dubai?
The Business consultants who are the Registered Agent to the Free Zone help the foreign investor to set up the offshore company in the following ways:
- Total assistance in the incorporation of the Company, complying with all legal documentation
- Assistance in the opening of bank accounts in the UAE.
- Registered office address in Dubai.
- Full assistance in ownership of real estate property in Dubai.
- Assistance for the right jurisdiction for the company.
- Full support and guidance to the companies on minimizing liabilities and increasing assets.
The Business Consultants offer comprehensive offshore company setup packages at very cost-effective prices. The services offered are rendered in a fully professional manner by studying all the business requirements of the company.
The Registered Agents handle all the formalities related to the offshore company registration in Dubai. The scope of work ranges from submission of forms, applications, bank account opening, and all other important documents reviews, etc.
The foreign investor need not be physically present for the offshore company registration in Dubai and they can focus on the more important tasks of their business. The Business Consultants in UAE have a team of experienced professionals, who render the services in a time-bound and cost-effective manner.
Hence, in a nutshell, Offshore Company Setup in Dubai has evolved into a lucrative business option for foreign investors and also an intelligent method to protect assets.
How to Open Offshore Bank Account in Dubai?
As per the statistics published by the UAE Central bank, there are 46 Commercial banks operating in the UAE & 68 Representative Offices of Foreign Banks in Dubai. The United Arab Emirates has earned the reputation of being the safest country for banking operations. With an extensive network of local and international bank presence combined with a conducive business environment makes UAE an attractive destination for global investors.
As a first step to opening a bank account, investors can register a company in any free zone or offshore jurisdiction. For such registration, they can seek the guidance of professional business consultants who are Registered Agents of Freezone or offshore. Upon registration of a company and taking up a residence visa under it, the consultants will introduce investors to the bank. They can open a bank account for the company as well as personal.
Investors can open a Dollar account, Dirham account, Euro account or any other currency account with any of the banks in UAE. Chequebook, debit card, credit card, online banking facility & token device are provided while opening Freezone company bank account. For the Offshore company bank accounts, only the online banking facility and the token device will be provided.
Each bank in the UAE has a different amount to be maintained as the average minimum balance in the company account. This amount varies from AED 25,000 to AED 200,000 depending on the banks. These banks also provide a variety of Investment options from which the investors can avail of good annual returns.
Why did the Europeans open a bank account in UAE?
The tax levied in many European countries are very high, for e.g: the latest tax rate applied to residents with no children on an average salary in their country is as follows:-
- Belgium- 42.80%
- Germany – 39.90%
- Denmark – 38.90%
- Hungary- 35%
- Austria -34%
- Greece – 25.4%
- OECD Average – 25.10%
- UK – 24.90%
- USA – 22.70%
- New Zealand – 16.40%
Precisely due to this high tax environment, most Europeans shift their residence to UAE, upon acquiring residence visa after incorporating their minimum package company in UAE. They can run their business in other countries while saving a considerable amount of tax, by having a bank account in UAE. In the UAE, the only tax levied is VAT ( Value Added Tax) at the rate of 5%, based on the activity & income of the company and there is no personal income tax for residents or non-resident expatriates.
Also, Investors can seek the help of well-established business consultants in Dubai to support in saving taxes and wealth management.
You may also be interested to know more about offshore banking destinations in the world.
To know more about Offshore Company Setup in UAE, talk to our expert Business Consultants right away!
Contact Us: Aurion Business Consultants